Less choice in the housing market with stock levels down but price signals are mixed

Less choice in the housing market with stock levels down but price signals are mixed

The residential property market remained tight in November, with new listings and the total volume of homes for sale down compared to November last year.

Property website Realestate.co.nz received 11,020 new listings throughout the country in November, down 7.6% compared to November last year.

The decline in new listings was almost nationwide with just two regions bucking the trend - Nelson & Bays where new listings were up 6.6% compared to November last year and Otago where they were up 10.9%.

The biggest decline in new listings was in the provinces with many recording double digit declines (see the chart below for the full regional breakdown).

The decline in new listings was also reflected in the lower level of total stock on the market, with Realestate.co.nz having 22,049 residential properties available for sale at the end of November, down 19.4% compared to the same time last year.

Total stock levels were down compared to a year ago in all regions of the country, with the biggest declines recorded in Taranaki -36.2%, Wairarapa -32.8%, West Coast -29.8% and Southland -29.0% (see chart 2 below for the full regional figures).

The lower level of homes for sale would have meant less choice for buyers and that would have helped to maintain prices, although pricing signals were mixed.

Realestate.co.nz's national average asking price was $680,592 in November, down slightly from $687,159 in October, with seven districts - Auckland, Coromandel, Gisborne, Wairarapa, Wellington, Central Otago/Lakes, Southland, recording declines and the rest all posting gains in average asking prices compared to October.

In the key Auckland market the average asking price dropped back to $915,794 from $936,850 in October and $949,345 in November last year (see chart 3 below for the regional breakdown).

Asking prices in Auckland continue to fluctuate within a fairly tight range, suggesting little overall price movement in the region.

 

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Asking prices in Auckland continue to fluctuate within a fairly tight range, suggesting little overall price movement in the region.

Has certainly looked that way, yeah.

.

10
up

"In the key Auckland market the average asking price dropped back to $915,794 from $936,850 in October and $949,345 in November last year.

Asking prices in Auckland continue to fluctuate within a fairly tight range, suggesting little overall price movement in the region."

Asking prices, not controlled for type of property or location. This isn't data, it's noise.

100%.
Total rubbish.

Palmerston North has witnessed stunning house price increases over the past two years.

That's where I'd put my money right now, if I had any......

Specifically, I'd buy something on a decent-sized piece of land in a premium location (like Hokowhitu).

TTP

For once I sort of agree with you.
However, my money would be in Bulls, Sanson, or Fielding for reasons which will become apparent in the new year..

That's just the tip of the iceberg.

High speed motorway between Wellington and Palmy?

Singapore airforce deal???

Confirmation that Auckland will move Port.
Requires inland Port near Kumeu.
Whenuapai to be sold to aid redevelopment of surrounding area.
All airforce operations moved to Ohakea.

Am I right?

Ironic that you take the same scatter gun approach as you often accuse TTP of doing, cmat.

??

1. I hardly ever engage directly with TTP because it's simply not worth my time.
2. I was taking a punt on what you might have been hinting at based on current affairs - was hardly taking it seriously, so not sure why you've taken offense. Perhaps I'm close ;)

Here's a tip - Maybe don't hint to commercially sensitive/non-public information you may have if you don't want anyone to guess at what you're alluding to.

Ahhh. Sorry, my bad. I got ya confused with CJ.

It's not commercially sensitive. Just hasn't been publicized yet.

All good.

Notice how I do not engage with below.

What was that nymad...? ¯\_(° ͜ʖ °)_/¯

Hi cmat,

Much appreciate you not engaging with me. Your toxicity (and dodgy forecasts) is something I seek to avoid. Please continue to keep your distance from me.

TTP

Went to Bulls a few weeks ago.
A happening jumping place it is not.
Wellington sales by the way, in last 12m, LOWER than in previous 12m.
Price increase = lower sales.

Most airforce personnel at Ohakea live in nearby Palmerston North or Feilding as families need schools/amenities

Mike
Fewer properties available = greater competition = price increase?
Just wondering what it means for Auckland with listings down 7% and stock down 21% YOY.

Price increases in some areas, anecdotally, it seems mostly in Auckland City.
I suspect this location is doing best because people are bailing out of Hong Kong, or at least trying to get capital out of it, and are corporates and hence not subject to OBB.
Mixed in Auckland: some areas and particular properties are indeed selling well at auction but in other areas, prices are lower and so are sales.

Companies are subject to OBB.

What makes you think corporates are not subject to OBB? My understanding is the legislation applies to any company or trust with at least 25% foreign ownership or control.

Correct.

Bulls for sure. Ohakea is expanding at an outrageous rate

Go for gold.

I sold two large investments in Palmerston North last year for entirely the opposite reason.
And, pleasingly, the purchaser has communicated their buyer's remorse to me on numerous occasions.

They regret 20% increase in value of their investment? Seems weird/made up..

Simon
Don't be so naive - lots of posters make things up on this site.
You need to start to look at the positive - at least they are consistent as both their comments and claims are not realistic (i.e. total BS).
:)

Not that I particularly care what you think, but I can assure you this is 100% true - I'm not going to post the company name here for the same reason you operate under a pseudonym.

What reason do I have to talk down Palmy and make something like that up?

The obvious truth is that cmat now regrets having sold his two PN investment properties.

TTP

Are their remorse pleases you? Are you a psychopath or something? Geez..

20% unsubstantiated paper gains in the midst of a speculative credit bubble.
Wow. I'm crying into my latte right now.

The investments were earning below their cost of capital (that's a cash flow based metric in case you're unfamiliar with the concept of actual value) and local market demographics are nowhere near good enough to justify redevelopment of either site (that's a concept called "fundamental analysis" - look it up).
If anything the assets in question have deteriorated in both regards since we sold them.
The nature of the assets was no secret, the transaction involved a publicly listed company and it's all on the public record.

The purchaser and I are on good terms - He's joked whether I want them back.
I'm happy to be rid of them, his remorse gives me comfort that we made a good decision. Commercial reality.

And where did you put the money got from ripping your mate off ? Did it return a tax free passive 20% gain ?

Palmy has never been hotter than right now, 8 weeks inventory (sold out of stock in 8 weeks if nothing new listed, second only to welly with 7 weeks) , average house selling at 20 odd days, second to none.

You cashed your chips too early I'm going to have fun remembering this post over next 12 months as another 20% tax free gain gets added onto average palmy price over next year - irrational markets stay irrational longer than most rational people could ever imagine. You fail on human behavioural economics

"And where did you put the money got from ripping your mate off ?"

First of all, it was an open market transaction between two willing parties, neither acting under duress. No one got "ripped off".
I sell you a pair of jeans with a rip in it, and show you there is a rip in the jeans before you buy it. Is it my fault if you buy the jeans at a mutually acceptable price and find that you don't like the rip?
Have you ever been in business?

Simple, we reinvested the proceeds into projects that we expect *will* cover their cost of capital (as opposed to not) in areas with better demographics.
That's what you do when you engage in *productive* activities - it's called capital budgeting.
Finance 101.

We're not sitting on the cash.
Our feasibilities are based on getting 15-18% IRR on our projects. That's a 15-18% *annual* return without wishful thinking about movements in property prices.

I studied behavioural finance.

Thanks for your concern.

Speculation on projects success or failures , just as all business has elements of speculation also...

If it wasn't for Edison speculating that he would eventually succeed in inventing the light bulb then he would never have tried.

Good luck with your projects sounds a bit more work than simply holding. See you in this trend in 12 months I have it saved.

Do let me know how wrong I am on that in 12 months time vis-a-vis sitting on assets & doing SFA in places like Palmy North and surrounding areas - I hear Ekatahuna is going great guns too.

So guna try compete with Ryman and a million like it, goodluck..

PN has 88k population, constant growth rate of population, big uni, nz main/biggest army base, mid central hospital, Gov agencies, Ohakea nearby, 1 mill ppl in surrounding areas within short drive - as farmers/rural townies age guess where they move - Palmy.

Eketahuna, don't know the place, too small, no wide range of industry - no way thanks I'll leave that 1 to you

OK, cool thanks for the hot tip on Palmy demographics - I never would have got that info from Stats and other publicly available sources.

That combined with the fact that others can't make it work is really making me consider the folly of selling.

Hi Simon
"I'm going to have fun remembering this post over next 12 months"
Unfortunately people such as cmat usually just disappear - Retired Poopy, Joe Wilkes (property bubble was going to burst big time in 2019), lonewolfnz (had a "sneaky" - his term - buy of bitcoin at $US12300 to see it only go down since) . . . . and many others who make silly wild unsubstantiated claims and then just don't stick around to acknowledge that they were wrong. All gone.

What wild claims have I made?

Sure, I'm on the side that thinks we live in completely unsustainable monetary times - ascribing to the notion that the world has gone mad on credit.
You think, what exactly? That the party will just go on unabated into perpetuity, ad inifinitum?

P8, Look at the figures in the information in the article, prices are down especially in Auckland and there's going to stagnate for some time to come. Even if you invest in the regions which are showing more positive results it's going to be very slow gains due to the low wage economy.

"I sold two large investments in Palmerston North last year for entirely the opposite reason.
And, pleasingly, the purchaser has communicated their buyer's remorse to me on numerous occasions"

You say the buyer called you multiple times to say "I so regret buying this place from you" I call BS (also why would that please you?)

I second your call on BS

As above, pure, unadulterated BS.

TTP

Because I'm good friends with the guy who has been put in charge of making that investment work... and he's told me it's a hard asset.
Most industries in NZ are small collegial networks, which you'd know if you ever worked in an executive capacity.

It pleases me because it shows we made a good decision to sell.
We got out with full value on sites without much/any upside. That's a good outcome - especially when there are better returns if we deploy that capital elsewhere in the country.

It's like no one on here has ever worked in a commercial environment and only knows how to put dumb money to work on passive assets... oh wait.

… or maybe no one here has worked on an ineffective board playing with other people's money?

Agree as in Howick, Buckland Beach, Pakuranga and near around suburbs, houses that are not being sold are houses with high asking price - 10% to 20% more than what they would actually get but as few houses have gone for high, everyone is expecting those high price but seems doubtfull (House in Howick - not great with CV of 990 was expecting 1.1million but with failed auction was listed for 1079000 and after a week or two has been dropped to 995000 but still will be hard as the fair value in today's market is high 800s to early 900s - if lucky and this is just one example but have many whose expectation are quite high).

Jump or life that was seen in October / November is slowing evapirating and when the market opens in 2020 will be at lower level or may be in January will try to test the high asking but will eventually give up afterwards. SO FHB should unless they find a deal, now.

Do not see jump in house prices in absence of any trigger / foreign money (Though in RE Agents their is a feeling / Rumors that Chineese have found ways to manipulate or play around with the system and are active - how far is it true, only will time will tell) as low interest are the norm (low interest rate does help but still anyone on average kiwi wage has their limitation) so the proces that was started end of 2018 (After the FBB) will continue and this time may see significant fall (not Crash) to make a difference.

Agree that Auckland market had positive feel in October and November compare to earlier but cannot agree that value are again falling though that intensity of positivity is missing and chances are that the market may resume its downward trend or may be stabilise but going up in short term (Like october/november) is ruled out.

Agree. But it's hardly indicative that boom times are back in Auckland.
If anything, it still points to flatness/weakness.

Anecdotal I know, but last night we sat down and went online to check out all the open home that we've attended in the last couple of months. Of about 20 properties we've had a look at, only two not marked as sold, and one of those we know is under offer. Not sure on prices on some of them, but the ones with sale prices on homes.co.nz didn't go cheap.

Not a lot of good properties on the market, and they tend to go quick, at least in FHB price range. Might be completely different at the top end of the market.

Depends what you mean by the top end of the market. In the 2.5m-4.5m range, the better properties that are realistically priced tend to sell fairly promptly in the areas I keep an eye on (Mt Eden, Epsom, Remuera, parts of Greenlane and Parnell, occasionally something in the Bays).

An interesting upcoming auction is 6 Golf Road, Epsom. I haven't viewed it, but it looks like the sort of place that'll attract high interest and sell well above RV (3.15).

I'll take your word for it, A lil bit out of my price range.

Good luck with your search anyway. If it's any consolation we looked at over 100 properties before buying this time around.

Thanks, but we're not seriously looking at the moment, other priorities this time of year.

Just pick one and buy it. Here you go, take this one for $860k, perfect for you, lots of value to add. You're welcome.

https://rwellerslie.co.nz/properties/residential-for-sale/auckland-city/...

Ew, thats a hard pass.

Your attitude leaves much to be desired, sunshine. You too good for a bit of DIY? You strike me as the kinda guy that has soft hands...

I do wish you'd stop fantasizing about me so much, its rather creepy..

;-) ♥

Indeed. Much more use (to those interested in granular detail rather than averages) would be sales per bracket of $200k, from 650 - 1.4m.
We are not given this. Not by RE NZ nor REINZ. Latter do give brackets but much broader than $200k and to compared over a long enough period.

Who is going to buy in the Regions?
A lot of previous demand came from ....The Auckland Investor.
Now if they can't borrow any more, based on the falling collateral of their Auckland holdings, and they can't sell to Offshore buyers, who have had their capacity curbed, then where does the capacity to buy come from?
Yes, there's local demand from local buyers in those regions, but by far and away the biggest driver has been from demand leaking out of our biggest city into the Regions.
Shut that down, and then what? ( Even worse. If their Auckland holdings continue to deteriorate they may HAVE to sell what they already own in the Regions to meet all sorts of other commitments)

A lot of people I talk to are immigrants coming over on work Visa's.

They have to work for a period of time, and jump other hurdles to get residency (points system).

They get more points if they locate in a region outside of Auckland and almost all I've talked to think points gained from simply locating outside Auckland are easiest points on offer (for residency).

So you reckon the demand to buy property will come from immigrants on work visas? Oki doki...

Maybe Auckland renters who are priced out of owning in Auckland, or at least the parts of Auckland they want to live in, but want to own property somewhere?

Hmmm, but the big problem for want to be owners in Auckland is the deposit, not the mortgage payments on an entry level house which isn't much above the rent they are likely already paying. So if they don't have a 10-15% deposit on an Auckland property to secure a mortgage, they are even less likely to have the 30% deposit required of most investors on a property worth half as much elsewhere.

Ah, good point. That's unfortunate.

"Housing market":

1. Listings down
2. Sales down
3. Asking prices down

Boom times.

Horowhenua is another region that has been doing extremely well over the last 3-4 years...I don't feel bad because when Auckland was booming we were falling further behind so it's just a little catch up for us. Transmission Gully, Growing population, record low interest rates...not sure our bubble is about to burst anytime soon :)

NZ total residential sales 12 months to end of September 2018: 76,017
12 months to end of September 2019: 72,667

Auckland, 12 months to end of Sept 2019: 19,905
12 months to end of September 2009 (post Lehman implosion and freeze of world asset markets): 20,878

Lots more people, much lower interest rates, much more stock and FEWER sales. Brilliant.
This is what happens when a housing market is a savings scheme for the 30% who own all rental property, whilst owner occupation continues to go down the gurgler.

In the interest of balance, here are figures for Auckland City, which is doing better than in 2018 in last 3 months, but worse in last 6 and 12 months: ie trend improving.

Auckland City 3m residential sales, July-Sept 2018: 939 (and apartments 499)
3m of 2019 to end of Sept; 966 and apartments 479.

So, in last 3m, Auckland City residential sales up 2.87% on 2018. Apartments down 4%

The 6 month comparison was down 3.44% and the 12 month was down 3.85% for residential.
For apartments it is down 19% over the 6 month period and 18% over 12 months.

Overall, Auckland residential sales for 12 month comparison are 4.6% lower than in previous 12m

SO, will people please cease to refer to "housing market uptrend"

The uptrend is in last 3m in Auckland City but not in apartment sales.

The 12 month comparison also shows sales lower in: Wellington, Christchurch and Whangarei.
In Nelson 12 month trend is minuscule rise: up 0.0045%

Good info Mike keep posting. :)

Kumeu's median value dropped an astonishing 30 percent in the last 12 months, from $1,595,000 to $1,110,000.....Agents have blamed "uncontrolled development" and a "balloon in supply" for driving down Kumeu's prices....Kumeu real estate agent (said) "we've got over 300 houses available for purchase at any one time"......The second-biggest faller in Auckland, and New Zealand, was Westmere, where the median value of all properties in the suburb dropped 10.4 percent in the last 12 months..... Also cooling-off were Long Bay (down 9.6 percent); Glendowie (down 8.4 percent); and Ponsonby (down 8 percent ). The biggest drop in property values outside of Auckland was in Westmorland, where the median value dropped 6 percent year on year to $710,000.....Defying the squeeze in Auckland's higher value suburbs was Omaha, where the median value of all properties was up 16.9 percent in the last 12 months ...The sudden price rise is frustrating for the buyers but great for those who are selling,
https://www.oneroof.co.nz/news/37020

Now, we can all look at stats any way we want, but that this is in the MSM might be quite telling.

Super cheap rates making it easier to hold, and a new sniff of capital gains. Is any one surprised....?

interesting to note that Canterbury asking prices up over 5% in a month.
There is not her surer than Christchurch is going
To have some price increases in the future and now is a great time to be investing.

"Forty billion dollars has been poured into rebuilding it and the sounds of a vibrant city are returning...... it estimates it needs 100,000 more residents in the next 10 years.....Like many western cities, its population is ageing... https://www.stuff.co.nz/national/the-detail/117836844/the-detail-christc...

Christchurch has lost its purpose. What does it do that other towns/cities in New Zealand do not do already? 150 years ago, it had a purpose ( the Canterbury Plains and all the rural exports) but today? It was broken by the earthquake; people moved away ....they aren't going back. they'll stay where they went to, so will the businesses that relocated. That 'tipping point' looks all downhill to me. ( NB: We are one of those who left, and aren't going back)

https://www.oneroof.co.nz/news/36969

https://www.stuff.co.nz/business/117851384/owners-listing-their-homes-fo...

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=122...

Interest rates are low and housing market in summer will be upbeat.... Doubtfull as FHB on their earning in NZ, can they afford to borrow a million or even 800000 just because intetest rates are low....can one borrow what one wants.............despit low interest rate - each FHB has a limitation to borrow.

Will have clear understanding on the direction of the housing market in next month or two.

To the contributor who stated that corporates arecovered by overseas buyer ban:
Not quite:
https://www.rnz.co.nz/news/political/359942/government-relaxes-rules-on-...

And where are most apartments sold? In Auckland City. Which is only area of Auckland apart from Papakura that is selling more recently in particular?

Yes Mike, foreign buyers can buy apartments under specific conditions, I thought that was well known. Note that it applies to both corporate and non-corporate foreign buyers.

A more definitive reference:
https://www.linz.govt.nz/overseas-investment/information-about-developin...

Cheers for that